SL Green, New York City’s largest office landlord, and its joint venture partner Ivanhoe Cambridge, have entered into a contract to sell their leasehold interest in the office condominium at 1745 Broadway. The new owner of the Midtown Manhattan office space will be an institutional client of Invesco Real Estate, which will snatch the office asset for $633 million.
“After securing a long-term lease and extension with investment-grade tenant Random House and stabilizing the asset, we determined that this was the right time to monetize our success with the property and redeploy that capital into more accretive investment opportunities, including our share-repurchase program,” David Schonbraun, co-chief investment officer at SL Green, said in a statement.
The transaction, which boasts a price tag equating to $939 per square foot, is expected to close in the second quarter of 2018. According to The Real Deal, the condo now boasts a valuation cap rate of 3.75%, having generated $23.9 million in annualized revenue in 2017. SL Green’s decision to sell its ownership stake in the Hell’s Kitchen property comes a decade after it first decided to invest in it.
The New York-based real estate investment trust has entered into two other deals, to sell the Mount Pleasant Corporate Center located at 115-117 Stevens Avenue in Valhalla, N.Y., and the Reckson Executive Park in Rye Brook, N.Y. The combined sale price for these suburban properties rises to $67 million.
Encompassing 684,895 square feet, the office condo at 1745 Broadway spans across floors 2 through 26 of the 50-story mixed-use building known as the Random House Tower. The building is anchored by Penguin Random House, which leases a 604,000-square-foot space and occupies floors 2 through 19 and 21 through 23. The other major tenant is the PDT Partners hedge fund, which signed a 53,540-square-foot lease in 2016—per Yardi Matrix data.
The LEED-certified Class A+ building is located three blocks away from Central Park and Columbus Circle, and occupies the entire block front between 55th and 56th streets. In addition to the office condo, the 50-story high-rise includes 43,000 square feet of first-floor retail and 245,105 square feet of residential space—floors 27 through 50. Built in 2002, the Random House Tower is also known as the Park Imperial Apartments.